Two Hospitals. One Day. Same Accusation.

On May 20, 2026, Mount Sinai Health System and the University of Kansas Hospital Authority each filed federal lawsuits against CVS Health Corporation — on the same day — making nearly identical allegations.

Mount Sinai, filing in Manhattan federal court, claims CVS stole $121 million since 2020, according to the NY Post and amNewYork. KU Hospital Authority claims CVS pocketed nearly $62 million over the same 2020–2025 period, according to KCUR Kansas City Public Radio.

Combined tab: $183 million. All of it allegedly taken from a federal program designed to help the poorest Americans afford prescription drugs.

What the 340B Program Is Supposed to Do

The 340B Drug Pricing Program — created in 1992 — requires drug manufacturers to sell outpatient medications to qualifying safety-net hospitals at steep discounts. These hospitals serve low-income, uninsured, and underinsured patients regardless of ability to pay.

The system works like this: the hospital buys drugs at a discount, dispenses them to patients, gets reimbursed by insurers or Medicaid at standard rates, and keeps the spread. That margin funds free and subsidized care for people who can't pay.

Simple concept. Until a pharmacy giant figures out how to skim it.

The Alleged "Secret Pricing Scheme"

CVS wasn't just dispensing pills here. According to both lawsuits, CVS used its vertically integrated corporate structure to run a hidden arbitrage operation.

Here's how amNewYork describes it: CVS subsidiaries receive initial payment for drugs from patients or the hospital, then receive reimbursement from Medicaid for those same drugs. The hospital is supposed to get the difference back — that's the whole point of 340B. Instead, CVS allegedly pocketed it.

The kicker: every entity that should be checking CVS's math is also owned by CVS. The pharmacy. The pharmacy benefit manager, CaremarkPCS. The insurance company, Aetna. According to KCUR, this vertical integration allowed CVS to make "improper" determinations entirely in secret, with no independent oversight.

When Mount Sinai and KU Hospital Authority asked for audits to verify the numbers? CVS refused to provide the data — and then terminated both hospitals' contracts, according to both lawsuits. The suits call the terminations direct retaliation for uncovering the scheme.

RICO Charges. Not a Typo.

Both lawsuits invoke the Racketeer Influenced and Corrupt Organizations Act — RICO. That's the same statute used to prosecute organized crime.

Mount Sinai's charges include racketeering, fraud, breach of contract, and unjust enrichment, according to amNewYork. KU Hospital Authority's suit uses almost identical language, according to KCUR.

These aren't hospitals whining about late payments. They're accusing a Fortune 500 corporation of running a coordinated, concealed criminal enterprise against a federal aid program for poor people.

CVS declined to comment on the ongoing litigation, according to amNewYork, saying it "remains focused on serving our customers and executing our business priorities."

What Mainstream Coverage Is Missing

Most reporting treats this as a straightforward he-said-she-said lawsuit story. It's more complicated.

First: the coordination. Two hospital systems in completely different parts of the country filed nearly identical RICO suits against CVS on the exact same day. This suggests a broader legal strategy — and likely means more hospitals are coming.

Second: the regulatory context. The NY Post notes that Congress is already reviewing the 340B program over concerns it has become a profit center for large hospital systems rather than a lifeline for the poor. Mount Sinai alone reportedly pulled in over $500 million from 340B last year — an 846% revenue increase over five years, according to the NY Post.

Both sides in this fight have been getting rich off a program meant for poor people. The hospitals collect massive 340B margins. CVS allegedly skims off the top before the money even arrives.

Third: vertical integration is the real weapon. CVS owns the pharmacy, the PBM, and the insurer. That means it sits on every side of every transaction simultaneously. No independent check exists. This is what happens when Washington allows a single corporation to control the entire drug reimbursement pipeline — and regulators looked the other way for years.

What This Means for You

If you're uninsured or on Medicaid in New York or Kansas, the money that was supposed to subsidize your prescriptions allegedly went to CVS shareholders instead.

If you're a taxpayer anywhere in America, this is your federal program being looted — and the loot is measured in nine figures.

And if you think this is isolated to two hospitals? The lawsuits were filed the same day, using the same legal theory, describing the same scheme. CVS operates in all 50 states.

Congress is already sniffing around 340B. Federal prosecutors should be too.